Sphere Entertainment (SPHR) Q3 2026 earnings summary

Executive summary

• Q3 revenue rose 4% YoY to $274.260M and adjusted operating income (AOI) rose 8% to $39.152M; operating loss widened to $240.571M and attributable net loss to $176.038M.

• Nine-month revenue rose 18% to $974.311M and AOI increased 50% to $200.052M; attributable net loss of $216.419M included a $177.553M MSG Networks goodwill impairment.

Financial highlights

• Q3 interest expense fell to $8.011M from $9.399M; nine-month expense fell to $24.323M from $61.467M, primarily reflecting troubled-debt restructuring accounting for MSG Networks.

• Nine-month operating cash flow was $159.468M versus $63.127M; net capital expenditures were $62.758M versus $37.139M.

• Q3 basic and diluted loss per share were $4.84 versus $3.47; nine-month diluted loss per share was $5.99 versus $1.54.

• SG&A was $98.3M, up $5.6M YoY, primarily from employee compensation and benefits; lower stock price-related award mark-to-market adjustments partly offset the increase.

Outlook and guidance

• Las Vegas Sphere growth is expected in 2027, driven by utilization, tickets per event, residencies, sponsorship and new content; management expects a strong fourth and first quarter after weaker-than-expected summer demand.

• A new U.S. Sphere project announcement was expected during the quarter; three to four Sphere Experiences are expected to be playing by end-2027.

• Rocky Horror is in production and expected to debut by end-March 2027; Metallica has 24 residency concerts scheduled through March 2027, with Backstreet Boys and Eagles residencies expanded to 63 and 74 nights.

• Sphere Abu Dhabi construction is expected to finish by end-2029; National Harbor development remains subject to definitive agreements, incentives and approvals.

• Liquidity is expected to cover operations and debt service for the foreseeable future, partly dependent on significant positive Sphere cash flow; a shortfall could prompt cost reductions and capital spending or investment deferrals.